The relative cost of achieving a fixed standard of living in different situations is called
A) A cost of living index
B) Compensating variation
C) Real income
D) Consumer surplus

Question

Quizplus · Accepted Answer

A cost of living index measures the relative cost of achieving a fixed standard of living in different situations. It takes into account the prices of goods and services that are necessary to maintain a certain level of well-being, such as the cost of housing, food, healthcare, and transportation. This index can help individuals and policymakers understand how changes in prices affect people's ability to maintain their standard of living over time.

The Relative Cost of Achieving a Fixed Standard of Living